EXHIBIT 10.35
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS AGREEMENT made this 7 day of December 2006 by and between Make-It
Manufacturing, Inc., with its principal place of business located at 000 Xxxxx
Xxxx, Xxxx X, Xxxx Xxxxxx, Xxxxxxxxxx 00000 hereinafter referred to as
"Supplier", and Smart World Organics, Inc., having its main office at 00000
Xxxxx Xxxx Xxxxxx, Xxxxxxx 00000, hereinafter referred to as "Distributor".
WHEREAS, Supplier is the inventor (patent #6,612,073 B1) and manufacturer of a
plastics molded product known as the Agro Tower used in the Green Industry which
is defined as the horticulture, turf and agriculture segments both retail and
wholesale and;
WHEREAS, Distributor is in the business of manufacturing and distributing
products related to those manufactured by Supplier;
WHEREAS, Supplier desires to grant and Distributor desires to acquire, exclusive
rights to market Supplier's product used in the Green Industry that consists of
horticulture, turf and agriculture segments both retail and wholesale;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto agree as follows:
1. DISTRIBUTORSHIP
1.1 Distribution Rights
Subject to the terms and conditions set forth in this Agreement, Supplier
hereby grants to Distributor the exclusive right to market and distribute within
the Territory as set forth in Schedule "A" attached hereto (the "Territory"),
certain products manufactured or formulated by Supplier and listed in Schedule
"B" attached hereto (the "Products").
1.2 Term
The term of this Agreement shall commence as of the date set forth above
(the "Effective Date") and continue for the life of the patent, whereupon the
Agreement shall expire unless both parties agree to an extension of the term
hereof, which extension may be subject to additional terms and conditions.
1.3 Trademarks and Trade Names
During the term of this Agreement, Supplier grants to Distributor if it so
desires the right to use the trademarks and trade names of Supplier as necessary
for the sole purpose of allowing Distributor to fully promote and market the
Products pursuant to the terms of this Agreement. The Distributor is also
allowed to establish its own trademarks and trade names for the product. If,
during the term of this Agreement, a trademark registration is to take place in
the Territory by the Distributor, all rights shall belong to the Distributor,
who shall also bear the costs for such registration. Whenever Distributor
employs any trademark of Supplier to be used in any form of printed material,
Distributor shall place an asterisk immediately after and slightly above the
first use of the trademark referring to a footnote reading "Trademark of
Supplier." Distributor shall deliver to Supplier all Distributor's promotion and
advertising material for Supplier's review, prior to such promotion or
advertising utilizing any of Supplier's trademarks or trade names. Distributor
agrees not to use any promotion or advertising that Supplier finds unsuitable in
its reasonable discretion.
1.4 Authority
Distributor is an independent legal entity, and the relationship between
Distributor and Supplier is entirely based on Distributor's purchasing and
selling Supplier's products for Distributor's own account. Distributor shall
have no authority whatsoever to bind or represent Supplier in any respect.
Nothing contained herein shall be deemed to create a partnership between the
parties or the relationship of principal and agent.
2. DISTRIBUTOR OBLIGATIONS
2.1 Marketing Efforts
Distributor agrees to use its best endeavors to promote the sale of the
Products in the Territory on the maximum possible scale by all usual means and
to act loyally to Supplier in all matters involved in this Agreement.
(a) inform Supplier immediately of any changes in Distributor's
organization or method of doing business which might affect the performance of
Distributor's duties hereunder; and
(b) keep Supplier informed at all times of the market conditions,
competitive products and prices, and other facts material to the marketing of
the Products in the Territory.
2.2 Non-Competition
During the term of this Agreement, Distributor shall not, directly or
indirectly, distribute in the Territory, products similar to Suppliers'
purchased from any person other than Supplier. In addition, Distributor shall
not, directly or indirectly, manufacture or distribute in the Territory,
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products which compete with the Products under this Agreement, unless otherwise
agreed by the parties hereto, nor shall Distributor seek customers for the
Products outside the Territory nor establish or maintain any branch or
distribution depot outside the Territory for the sale of the Products without
the prior written permission of the Supplier.
2.3 Prohibited Practices
Distributor agrees not to pledge, in any manner, the credit of Supplier nor
to receive any money on behalf of Supplier nor to make any contracts or
commitments on behalf of Supplier nor to make any warranties or other
representations regarding the Products other than those authorized by Supplier
in writing.
2.4 Insurance
Distributor represents that it maintains and will continue to maintain
sufficient insurance under Worker's Compensation, comprehensive general
liability insurance, including errors and omissions insurance and property
damage insurance, in amounts sufficient to cover potential claims against
Distributor.
3. SALES
3.1 Distributor Prices
Supplier shall, in its sole discretion, establish the prices to be charged
to Distributor for each Product (the "Distributor Prices"). The current
Distributor Prices are set forth in Schedule "B" attached hereto. Supplier shall
have the right, in its sole discretion, to increase or decrease the Distributor
Prices upon sixty days (60) written notice to Distributor. Distributor Price
increases will not affect orders already accepted by Supplier. Price decreases
shall apply to all products not delivered. Prices shall be subject to amendment
by Supplier from time to time, but only if Supplier experiences a material
change in the cost of raw materials, or other supplies used in the manufacturing
of the Product.
3.2 Distributor Orders
Distributor shall place written orders with Supplier on or before the 15th
of each calendar month. The quantity ordered for delivery for the first month
shall be firm.
3.2 During the term of this Agreement Supplier shall forward all orders received
for the products to Distributor and shall prominently display the exclusivity
with Distributor on its website.
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3.4 Security Interest
Supplier reserves a purchase money security interest in the Products to
secure Distributor's payment obligations. Such security interest is retained
until Distributor's payment obligations are satisfied in full.
3.4 Financing
Distributor, and not Supplier, shall be solely responsible for all risk of
nonpayment for Products distributed on credit.
3.5 Taxes and Licensing
Distributor shall:
(a) pay all customs, import, excise, sales, and other similar duties and
taxes payable in respect of the Products shipped to Distributor.
(b) obtain any licenses, authorizations, permissions, and other documents,
and comply with all formalities in a state for the import, export,
distribution, sale and/or other disposal of the Products in and from
each state.
4. DELIVERY AND RISK OF LOSS
4.1 Delivery
Supplier shall ship the Products ordered by Distributor within the normal
shipping schedule established by Supplier from time to time, but cannot
guarantee a specific shipment date. Accordingly, Supplier's sole obligation to
Distributor shall be to ship Products as promptly as reasonably practicable.
4.2 Risk of Loss
Delivery shall be made F.O.B. Supplier's plant. Possession of and title to
all Products ordered hereunder, excepting Supplier's security interest therein,
shall be deemed to pass to Distributor upon delivery to the common carrier at
the point of shipment. Distributor shall thereupon assume all risk of loss or
damage, except for any loss resulting from the negligence of Supplier.
Transportation charges and cost of insurance, which may be incurred shall be
added to the Distributor Price for each Product and shall be paid by
Distributor.
4.3 Inspection
Distributor shall inspect all Products immediately upon arrival and shall,
within seven calendar days of arrival, give written notice to the common carrier
and Supplier of any claim for damages or shortages. Distributor shall give
written notice to Supplier within ten (10) calendar days of arrival that any
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Product does not conform with the terms of this Agreement. If Distributor fails
to give any such notice, the Products shall be deemed accepted for all purposes
of this Agreement.
5. WARRANTY AND LIMITATION OF LIABILITY
5.1 Warranty Disclaimer
Supplier's sole warranty with respect to Products sold is set forth in
Supplier's Standard Conditions of Sale. However, such warranty shall in any
event expire twelve (12) months from delivery to Distributor. SUPPLIER MAKES NO
OTHER WARRANTIES TO DISTRIBUTOR OR ANY CUSTOMER OR OTHER THIRD PARTY, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
5.2 Limitation of Liability
UNDER NO CIRCUMSTANCES SHALL SUPPLIER BE LIABLE TO DISTRIBUTOR OR ANY CUSTOMER
FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OPERATION OF THE PRODUCTS,
EVEN IF SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCES SHALL SUPPLIER HAVE ANY
LIABILITY WHATSOEVER FOR ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR
ITS PERFORMANCE IN EXCESS OF THE TOTAL DISTRIBUTOR PRICES PAID BY DISTRIBUTOR
HEREUNDER DURING THE SIX (6) MONTHS IMMEDIATELY PRECEDING THE FILING OF SUCH
CLAIM.
6. TERMINATION
6.1 Termination on Notice
Supplier shall have the right to terminate this Agreement immediately upon
notice to Distributor if: (a) Distributor becomes insolvent or party to any
bankruptcy or receivership proceedings or makes an assignment for the benefit of
creditors; or (b) Distributor fails to comply with the confidentiality and
ownership provisions of this Agreement. Either party shall have the right to
terminate this Agreement upon thirty (30) days prior written notice, if within
such thirty (30) day period a default or material failure of any of the
provisions of this Agreement is not cured.
6.2 Obligations Upon Termination or Expiration
Distributor expressly agrees that termination according to this Agreement
shall not cause Supplier to reimburse or pay Distributor in any way for loss of
profits, investments made or for like causes. Upon termination or expiration of
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this Agreement for any cause, Distributor shall immediately cease representing
itself as a distributor of the Products.
7. CONFIDENTIALITY AND PROPRIETARY RIGHTS
7.1 Confidential Information
Distributor acknowledges that in the course of dealings between the
parties, Distributor will acquire information about Supplier, its business
activities and operations, its technical information and trade secrets, all of
which are highly confidential and proprietary to Supplier (the "Confidential
Information"). Confidential Information shall not include information generally
available to or known by the public, or information independently developed
outside the scope of this Agreement. Distributor shall hold all such
Confidential Information in strict confidence and shall not reveal the same
except pursuant to a court order or equivalent arbitration tribunal order. The
Confidential Information shall be safeguarded by Distributor with at least as
great a degree of care as Distributor uses to safeguard its own most
confidential materials or data relating to its own business. The provisions of
this paragraph shall survive the termination of this Agreement.
Supplier acknowledges that in the course of dealings between the parties,
Supplier will acquire information about Distributor, its business activities and
operations, its technical information and trade secrets, all of which are highly
confidential and proprietary to Distributor (the "Confidential Information").
Confidential Information shall not include information generally available to or
known by the public, or information independently developed outside the scope of
this Agreement. Supplier shall hold all such Confidential Information in strict
confidence and shall not reveal the same except pursuant to a court order or
equivalent arbitration tribunal order. The Confidential Information shall be
safeguarded by Supplier with at least as great a degree of care as Supplier uses
to safeguard its own most confidential materials or data relating to its own
business. The provisions of this paragraph shall survive the termination of this
Agreement.
7.2 Proprietary Rights
Distributor acknowledges and agrees that the Products, including without
limitation, the specific design and structure of individual Products and their
interaction, the layout designs as well as other design rights and know-how
related to the Products are and shall remain the sole and exclusive property of
Supplier and shall not be sold, used, revealed, disclosed or otherwise
communicated, directly or indirectly, by Distributor to any person, company or
institution whatsoever other than for the purposes set forth herein. It is
expressly understood that no title to or ownership of the industrial or
intellectual property rights in or to the Products, or any part thereof, or any
aspect related to or trade secret involved with the Products is hereby
transferred to Distributor. In addition, Supplier retains all rights to
modifications and changes made to the product design. Distributor shall not
adapt copyrightable aspects of the Products in any way or use them to create a
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derivative work. It is expressly understood that no title to or ownership of any
aspect of the Products, or any part thereof is hereby transferred to
Distributor.
7.3 Specific Remedies
If Distributor commits a breach of any of the provisions of paragraphs 7.1
or 7.2 above, Supplier shall have, in addition to all other rights in law and
equity, (a) the right to have such provision specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that any such
breach will cause irreparable injury to such party and that money damages will
not provide an adequate remedy and (b) the right to require Distributor to
account for and pay Supplier all compensation, profits, monies, accruals,
increments or other tangible benefits (collectively "Benefits") derived or
received as the result of any transactions constituting a breach of any of the
provisions of this Article 7, and Distributor hereby agrees to account for and
pay such Benefits.
8. INDEMNIFICATION
Distributor agrees that it will sell, handle, store, transport and use, or
apply the product in a safe and reasonable manner, and in strict conformance
with Supplier's specifications therefore, and that Supplier shall not be liable
for any loss, damage or injury to any person or property occurring after
delivery of the product by Supplier to Distributor. Distributor agrees that it
shall indemnify and hold Supplier harmless from and against all claims, damages,
losses, and expenses, including legal fees, arising out of or resulting from the
negligent sale, handling, storage, transport, use or application of the product
by Distributor, or its employees, agents, customers, or anyone for whose actions
any of them may be liable.
Supplier agrees that it shall indemnify and hold Distributor harmless
from and against all claims, damages, losses, and expenses, including legal
fees, arising out of or resulting from the negligent manufacturing, sale,
handling, storage, transport, use or application of the product by Distributor,
or its employees, agents, customers, or anyone for whose actions any of them may
be liable.
9. SUPPLIER DECLARATION
Supplier has no actual knowledge of any present claim by any third party
that the import and/or sale of the Products may infringe any patent, registered
designs, trademarks, copyright, or similar rights existing or registered in any
of the countries in the Territory. Supplier declares to the best of its
knowledge that the sale and use of the Products shall not involve infringement
of any third party's intellectual property right. Supplier does not make any
further warranty, either express or implied, under statutes or common law in
respect of any patents, registered designs, trademarks, copyrights, or similar
rights of third parties.
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10. GENERAL
10.1 Force Majeure
A party to this Agreement shall not be responsible or liable to the other
party if the first party is prevented, hindered or delayed by reasons of any
force majeure circumstances to perform its contractual obligations according to
this Agreement. In this clause, "force majeure circumstances" shall mean any
war, riot, social disturbance, act of God, strike, lockout, trade dispute or
labor disturbance, accident, breakdown of plant or machinery, fire, flood,
difficulty in obtaining workmen or materials or transportation, or any other
circumstances whatsoever outside the control of the party.
10.2 Governing Law and Arbitration
The construction, validity, and performance of this Agreement shall be
governed in all respects by the laws of the State of California. Any dispute
arising out of or in connection with this Agreement shall be settled exclusively
and finally by arbitration conducted in a location agreed to by the parties and
if the parties cannot agree within 30 days of the claim being served by one
party against the other then and in that event the arbitration shall be
conducted the City of Los Angeles, State of California, in accordance with the
Rules of the American Arbitration Association. All limitations of liability set
forth in this Agreement, including but not limited to the limitations set forth
in Article 5 hereof, shall be binding and given full force and effect in any
such arbitration. The arbitration shall be conducted by three (3) neutral
arbitrators who are selected by agreement of the parties from the list of
arbitrators maintained by the American Arbitration Association. The arbitrators
shall be selected within a period of thirty (30) days after the date either
party hereto receives from the other a written demand for arbitration. Should
the parties fail to agree on the choice of arbitrators within such thirty (30)
day period, the arbitrators shall be appointed by the American Arbitration
Association. Judgment may be entered upon any award rendered by the majority of
the arbitrators in any court of competent jurisdiction, or application may be
made to any such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. Notwithstanding the agreement of the parties
hereunder to submit disputes to binding arbitration, Supplier shall not be
required to resort to arbitration in the event of a breach by Distributor of the
terms in Article 7 hereof, but shall be entitled to resort to the applicable
court for any equitable relief available for the redress of the breach thereof,
including, but not limited to, injunctive and interlocutory relief.
10.3 Independent Contractors
Distributor acknowledges that it is not, and shall not hold itself out as,
a joint venturer, franchisee, partner, employee, servant, representative or
agent of Supplier. It is expressly agreed that the parties hereto are acting
hereunder as independent contractors, and under no circumstances shall any of
the employees of one party be deemed the employees of any other party for any
purpose. This Agreement shall not be construed as authority for any party to act
for another party in any agency or other capacity, or to make commitments of any
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kind for the account of or on behalf of another party except to the extent and
for the purposes expressly provided for herein.
10.4 Non-Solicitation
Unless otherwise mutually agreed to by the parties in writing, each party
agrees not to hire or to solicit the employment of any personnel of the other
party.
10.5 Notices
Any notice required to be given hereunder shall be deemed given if in
writing and personally delivered or actually deposited in the United States mail
in registered or certified form, return receipt requested, postage pre-paid, and
addressed to the notified party at the address set forth above or as changed by
written notice.
10.6 Assignment
This Agreement and the rights granted hereunder may not be assigned by
either party without the prior written consent of the other, except that
Supplier may assign this Agreement without the written consent of Distributor to
a parent company, subsidiary, affiliate or a purchaser of all or substantially
all of Supplier's rights in the Products.
10.7 Severability
If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, such determination shall not affect
the validity or enforceability of any other part or provision of this Agreement.
10.8 Waiver
No waiver by any party of any breach of any provision hereof shall
constitute a waiver of any other breach of that or any other provision hereof.
10.9 Entire Agreement
This Agreement, including the Schedules attached hereto, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all previous proposals, both oral and written, negotiations,
representations, commitments, writings and all other communications between the
parties. This Agreement may not be released, discharged, changed or modified
except by an instrument in writing signed by a duly authorized representative of
each of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by a
duly authorized representative as of the date set forth above.
DISTRIBUTOR SUPPLIER
Smart World Organics, Inc. Make-It Manufacturing, Inc.
By /s/ Xxx Xxxxxxx By /s/ Xxxxxxx Xxxxxx
---------------------------- ----------------------------
Xxx Xxxxxxx President Xxxxxxx Xxxxxx, President
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Schedule A
TERRITORY
The Territory shall be worldwide.
Schedule B
Products and Prices
Products
1. The Product is the Intensive Plant Growing Stacking Container System commonly
known as the Agro Tower. 2. An additional product commonly known as the
reservoir shall also be manufactured by Supplier.
Prices
The price charged by Supplier for the Agro Tower shall be ____ per section.
The price for the reservoir shall be_____
All prices are FOB Suppliers plant and Distributor shall prepay through a wire
transfer or certified check. Distributor shall arrange all shipping.
